EcuaGold
signs Letter of Intent to enter into a
Joint Venture in Colombia
Vancouver, B.C. - September 25, 2008 - EcuaGold
Resources Ltd. ("the Company" or
"EcuaGold") (TSX Venture Exchange: EGR) is pleased to announce
that its wholly owned Colombian subsidiary, ColombiaGold Resources S.A.
("CGR") has signed a Letter of Intent (the "LOI") to
enter into a Joint Venture Operating Agreement (the "JV") with
the Colombian owners (the "Concessionaires") of the Santa Cruz
(87 Ha) and Palmichala (96 Ha) gold concessions (the
"Concessions"), located near the historic mining towns of
Remedios and Segovia in the Department of Antioquia, Colombia.
CGR signed a 90-day Exclusivity Agreement with
the Concessionaires in June 2008, and based on work done to date, CGR has
identified seven mesothermal quartz veins on the Santa Cruz concession
and six mesothermal quartz veins on the Palmichala concession. CGR has
also identified several other potential veins on the Concessions, which
need to be further investigated. The veins and associated structures are
distributed in a sub-parallel pattern, with 50 - 100 metre spacings. The
strike potential of several of the vein systems is believed to be +/ -
1.0 kilometre.
As is characteristic of the region, the veins
are generally narrow, ranging from approximately 0.20 to 2.00 metres in
width with an overall average of approximately 0.55 metres. The
Concessions contain numerous historical, as well as active, small-scale mines
with historical gold mining activities dating back to the early 1900's.
These small-scale mining activities have generally been limited to a
depth of +/ - 100 metres. By comparison, the Frontino Gold Mine, the
historic and largest gold mining operation in the region, has been mined
both along strike and to depths approaching two kilometres, with the
reported widths of the vein structures increasing at depth in some areas.
Selected assay results to date for certain key
vein structures are, as follows:
Santa Cruz Concession:
|
Vein
|
Sample Type
|
Width (metres)
|
Au (g/t)
|
Ag (g/t)
|
Meza
|
Channel
Channel
Channel
Channel
Channel
Channel
Channel
Channel
Channel
|
0.65
1.05
0.90
0.60
0.55
0.55
0.30
0.45
0.60
|
76.2
33.6
28.9
40.9
19.3
32.9
32.4
19.3
55.6
|
99.1
48.2
20.3
45.1
20.4
21.1
34.3
22.7
29.6
|
Isabel
|
Channel
Channel
Channel
Channel
Channel
Channel
Channel
|
0.30
0.30
0.70
0.30
0.30
0.20
|
19.7
22.0
32.3
62.3
36.1
51.9
|
39.1
12.8
21.3
47.2
22.5
71.5
|
El Cafetal
|
Channel
Channel
Channel
Channel
|
0.50
0.30
0.40
1.10
|
18.9
15.3
13.8
13.8
|
17.4
16.5
13.3
548.0
|
Palmichala Concession:
|
Vein
|
Sample Type
|
Width (metres)
|
Au (g/t)
|
Ag (g/t)
|
El
Criolla
|
Channel
|
1.60
|
5.1
|
3.5
|
Bomba
|
Channel
Channel
Channel
|
1.50
1.10
.074
|
4.0
7.3
3.6
|
1.7
1.0
1.3
|
Esperanza
|
Channel
Channel
Channel
|
0.20
0.26
0.20
|
19.0
11.7
97.3
|
11.2
6.2
82.2
|
A
summary table of all sample assays can be found on the Company's website:
www.ecuagoldresources.com.
CGR has conducted various due diligence related
geological programs to date, including geological and structural mapping,
underground surveying, rock chip sampling of outcrops and float and
channel sampling of surface and underground veins at two metre intervals,
where possible. These programs are ongoing. All samples from the
Concessions were sent to the Inspectorate sample preparation facility in
Medellin, Colombia for processing and were assayed at the Inspectorate
laboratory in Lima, Peru.
There has been only limited modern exploration
work, including some drilling, done on the Concessions, mainly in the mid
1990's. The Concessions are located within the Segovia Batholith and on a
mineralized trend which includes the Frontino Gold Belt. The Frontino Gold
Mine, located approximately 3.5 kilometres north-northwest of the
Concessions, has been in production for over 150 years, with reported
total gold production of approximately five million ounces. Colombia
historically has been the largest gold producer in South America, dating
back to the pre-Colombian period. It is reported that over half of
Colombia's historical production came from the Department of Antioquia,
which abounds with historical mines, both alluvial and underground hard
rock.
Pursuant to the terms of the LOI, CGR paid the
Concessionaires US$75,000 upon signing the LOI and will be required to
pay the Concessionaires an additional US$75,000 upon signing the JV
Agreement within 90 days from the signing of the LOI, with an automatic
30 day extension, if required. The Parties have agreed to form a JV legal
entity that will own the Concessions and all project assets that will be
contributed to the JV by the Concessionaires to earn their initial 50
percent JV equity interest. CGR will be deemed to have earned its initial
50 percent JV equity interest by committing to fund all future
exploration activities and exploitation expenditures, both for
small-scale and large-scale mining operations. CGR will be the Operator
of the JV reporting to a JV Operating Committee, consisting of two
representatives each of the Concessionaires and CGR. Upon funding the
preparation of a bankable feasibility study (the "Study") and
the development of a large-scale mining operation, as recommended
pursuant to the Study, CGR's JV equity interest will increase to 75
percent once commercial production is attained. The Parties will share in
any operating profits from either small-scale or large-scale mining
operations in proportion to their JV equity interests. Given the number
of historical and active small-scale mines on the Concessions, the
Parties intend to investigate the feasibility of initiating small-scale
mining activities (up to 100 tonnes per day) on the Concessions in
conjunction with implementing a detailed exploration program geared to
proving up reserves for a future large-scale mining operation. Any
small-scale mine production would be processed either at third party
processing plants in the region or the JV may install a pilot plant
operation, if economically justifiable.
Mr. Anthony F. Ciali, President and CEO, stated,
"We are very pleased to have entered into our first agreement to
acquire mineral property interests in Colombia and, in particular, in one
of the country's most historic and prolific gold producing regions. With
its Medellin-based geological team, CGR is actively investigating other
potential mineral properties and regions for future acquisitions.
EcuaGold is also aggressively pursuing mineral property interests in
Peru. We are encouraged by the number and quality of available Peruvian
prospects under investigation that meet with the Company's exploration
growth strategy."
Dr. William F. Lindqvist, a director of the
Company, is the Qualified Person in compliance with National Instrument
43-101 with respect to this release.
About EcuaGold Resources:
EcuaGold Resources Ltd. is engaged in the acquisition, exploration and
potential development of primarily precious metals properties in
Colombia, Peru and Ecuador. The focus of the Company's exploration
activities is presently in Colombia and Peru. EcuaGold controls,
through wholly owned subsidiaries, a 100 percent interest in 13 granted
concessions, comprising eight distinct projects, in Ecuador, covering
more than 34,000 hectares. The majority of EcuaGold's concessions are
located in southern Ecuador, a highly prospective region that is
currently host to a number of projects. These include Aurelian Resources'
Condor Project, IAMGOLD's Quimsacocha Project, International Minerals'
Rio Blanco and Gaby Projects and Dynasty Metals & Mining's
Copper-Gold Belt, Zaruma and Jerusalem Projects.
On Behalf of the Board of Directors of
ECUAGOLD RESOURCES LTD.
Anthony F. Ciali
President, CEO and Director
FOR FURTHER INFORMATION PLEASE CONTACT:
The statements contained in this news release that are not purely
historical are forward-looking statements. Forward-looking statements may
relate to the success of any of the company's strategic initiatives, the
company's expectations, beliefs, growth and future prospects, and the
company's position in the market and future opportunities therein.
Forward-looking statements may also include, without limitation, any
express or implied statement relating to future events, industry
performance, general business and economic conditions or circumstances,
regulatory and legal requirements, and other matters, many of which are
beyond the control of the company. Forward-looking statements involve
risks and uncertainties, which could cause actual results to differ
materially from those projected. All forward-looking statements included
in this news release are based upon information available to the company
as of the date hereof and the company does not undertake any obligations
to update forward-looking statements should circumstances or management's
beliefs or opinions change.
No
stock exchange has approved or disapproved the information contained
herein.
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